>> anton, thank you. ben, let you get ready for the close. interestingly, we are coming off the highs of the day. we had about 120-point gain at the highs of the session. now going out with a gain of about 72. stand by, though, for our exclusive interview with treasury secretary timothy geithner. could be market moving for tomorrow. that coming up on the second hour of "the closing bell." i'll see you tomorrow. it is 4:00 on wall street. do you know where your money is? welcome back, everybody. i'm maria bartiromo on the floor of the new york stock exchange. the banks helping the market today soar. triple-digit rally at the best. nasdaq slumping entirely due to apple. take a look how we're settling out. the dow finishing off the best levels of the afternoon, but up 72 points at 13,022. nasdaq negative, down 24 points on the session, almost 1%.

we'll get to the apple story coming up and how that contributed to the loss in the program. that's coming up. s&p 500 flat on the session. a lot of movement for the s&p. let's get straight to the markets and that rally we saw today. is today the start of a santa claus rally despite the fears over the fiscal cliff? rick, let me kick this off with you. what kind of expectations are out there on this fiscal cliff story? we seem to feel that there's a deal in the air. why else do we see such optimism today? rick? >> oh, for me? i'm sorry. i'll tell you what, maria, i'm not sure what's going on in washington. i'm not sure who those republicans are. i'm not so sure on whether the fiscal conservatives in the

party know something about some big reforms on medicare and medica medicare, social security is, any of the retirement or tax issues, but i'll tell you this. i think that all these stories aren't necessarily going lead us to the truth. i personally have a very size way i'm approaching this. the president is supposed to leave for a 21-day vacation in hawaii on december 17th. where he is on december 18th will tell me, and i think the markets will pay attention. i find it hard to believe, and i agree with bill and many, who are very not amused by the house taking their long weekend. i'm sure that the president would have no intentions of leaving until these issues are resolved. i think the market is being kind, but i think it's a timing issue. >> yeah, i think that's a good point. somebody mentioned the other day that the president is planning a trip to hawaii on december 17th. i said, what? they said, no, no, no, not unless the deal is done. we'll see about that. meanwhile, the house goes away for a lock weekend. all right, rob. what do you think? you think we're going to get a

deal done by the year end? >> i think there will probably be a deal done. i think you have to look at the market fundamentals today and say equities are as cheap as th they've been in 50 years relative to bonds. equities are going to stay firm. the second thing is the money flows going to bonds, that's probably not going to be the right place to be once they settle this thing. the third and the most important thing is the u.s. economy is the most vibrant, adaptable, innovative and creative economy on the planet. i think that means we're coming out and starting to see that in many sectors today. we're bullish and think you need to look at this on a positive frame. >> maria, i'm less bullish than that. that sounds very optimistic. i would love to believe that, but if you compare valuations of equities versus bonds, yes, there's a huge spread right now, but that doesn't necessarily make equities really cheap. it's just a relative trade. i think, also, yes, we're a

vibrant economy. we certainly are a strong economy. i think it's really unsustainable, the level of debt that we have in this country. we have $1 trillion in debt. i heard an incredibly succinct way of describing this. rick santelli actually said it this morning about how you can't say you're cutting $800 billion when really $80 billion is really from wars that are just going away. that's not really a cut. that's taking away the addition. i think you need to be pretty conservative. i think there's going to be a rally here year end, but you have to buy conservative cash flow and look overseas. i just don't think things are as rosy as everybody thinks. >> yeah, it's a goods point. i know a couple more people who agree with you on that. let me ask you this, michael. apple, stock was under pressure. it's been in a real free fall lately after hitting the highs of the year. what do you want to do with apple here? >> now i'm going to get optimistic, maria. i think that apple is really

having a problem right now in terms of their pipeline getting out the other side. they just barely are now catching up on iphone 5 sales. you have massive sales happening around the globe. they were just approved in china. apple is going to be under pressure. i know the last time i was on, i think with we talked about how apple could be moving towards $600 or $700 by year end. i don't think that's going to happen. when you see the earnings come out, the other end of the pipeline from this quarter and next quarter, particularly when a recent nielsen survey said that 30% of desk top and laptop users are now going to use their devices less because they're using, what, tablets, which apple is the market leader. then you're going to see blockbuster earnings over the next two quarters. >> all right. we'll leave it there. gentlemen, thank you very much. we'll be watching apple and this market on the possibility for a deal. thanks, gentlemen. see you soon. we're just 26 days away from the fiscal cliff. steve liesman joins us now live from the treasury. he has an exclusive interview with one of the key negotiators

at the white house, secretary of treasury timothy geithner. >> maria, thank you. i'm here with the secretary of treasury at a crucial time. thank you for joining us. >> thank you. >> speaker boehner has put forward a proposal which "usa today" says demonstrates more political courage the democrats have shown. the white house is saying today it's not even wor ty -- worthy of a response. what are we missing? >> i think we are making progress. they acknowledged they were prepapered to do $800 billion in higher taxes on part of the american economy. that's part of the balanced framework. that's definitely progress. what we need to see is have them acknowledge the rates go up. if they're willing to accept that and commit to that, then we think we could do something good for the economy. we can make the government use the taxpayers' money more

efficiently, lock in some spending savings and do some long-term entitlement reforms to make sure americans feel like they can retire with dignity. >> i want to make sure we're talking about apples and apples here, which is so hard in this discussion. the $800 billion which the republicans put forward, which would be a cap on deductions, how does that compare with how far the information is prepared to go when it comes to raising revenue from capping deductions? >> we don't actually know what the republicans think they can do in that context yet, because they haven't told us how they would propose to raise the $800 billion. we don't know whose taxes would go up. we don't know the mixes of rates and limitations they would support. we think there's a good case as part of an agreement alongside a tax increase on the wealthiest 2% of americans. we think with that mix of rates and deductions, we can reach agreement on something that's very good for the country. >> do you have a number? is there a number that the administration is comfortable

with when it comes to revenue from deduction caps? >> we proposed a 28% limitation on the value of deductions and exclusions that the top 2% of the wealthiest americansi could benefit from. that itself raises with the rate structure we proposed more than $500 billion over ten years. so that's one approach. we think that's a better approach than some of the other proposals. again, if they have an alternative, we have to see it. >> i want to understand the administration's position when it comes to raising taxes on the wealthy, those making more than $250,000. if republicans do not agree to that, is the administration prepared to go over the fiscal cliff? >> oh, absolutely. again, there's no prospect in an agreement that doesn't involve the rates going up on the top 2% of the wealthiest. all those americans get a tax cut under the framework under the first $250,000 of their income. in some sense, it's a tax cut for all americans. it's just for people who make more than that, we're going to

ask them to pay a modestly amount more. >> that's hard to understand given how much going over the fiscal cliff would hurt the economy. why is going over the fiscal cliff worth it for just this one component? if you can get the other components, why wouldn't you take that? >> good question. thanks for asking. what we're trying to do is put in place a comprehensive balance set of fiscal reforms that put us back on the path to living within our means and create room for investing to make the economy stronger, make sure we're protecting medicare for future generations, and forcing the government to use the taxpayers' resources more wisely. in that context, you have to have a significant amount of revenues. we don't see a way of doing it that makes any sense or has any political viability without rates going up as part of that deal. again, the size of the problem in some sense is so large it can't be solved without rates going up. i think there's a broad recognition of that reality now. if you listen carefully to the

talk not just in this town, but you hear what businesses and investors say, i think there's broad recognition that rates are going to go up as part of a deal. i think that's a welcome change. that's why i said i think there's been some progress, eni think we're going to get there. >> so again, if i could understand the negotiating position as best i can here. rates going up on the top 2%, does it have to go up to 39.6, or is there some flexibility in the administration? could it be a 37% number? >> what we've proposed is to let the rates go back to the clinton era, which was a very good time. we think that's the mix. we think that makes the most sense. as i've said before, i'm very skeptical. there's a different way to do it that works economically. >> just as i understand it, not raising rates on the wealthy is something that you would be prepared to go all the way on in terms of going over the cliff.

if the 39.6 number -- >> let me say it differently. congress needs to extends those tax cuts for all americans. they need to make sure no american who makes up to $250,000 a year is seeing their taxes go up. that's the most important thing people can do. remember, our obligation is first do no harm. we need to lift that threat over the economy. as part of that, along side that, we'd like to put in place, as i said, a carefully designed balance of reforms to put us on a path to sustainability. as long as there's recognition on the other side that those rates are going to go up at the end of this year, then we think we can reach an agreement on a set of reforms, as i said, which would be good for the economy. >> is the debt ceiling in a similar place as raising taxes on the wealthy? are you in a place where if there's no debt ceiling as part of this long-term agreement that you would walk away?

>> let me explain why. you've heard the president say this. i spent a lot of time talking to investors in the united states, small businesses, large businesses. i think there's very broad agreement with the position we're taking, which is we are not prepared to have the american economy held hostage to threats that republicans will force the country to default on our obligations. that would be a terrible thing for the financial security of the average american, for businesses, for confidence around the world and the united states. we are not prepared to put the economy through that. it makes no sense for them to try and do that. again, it's just too damaging. if you look back to what happened the summer of 2011, you can just see how damaging that was at that time. we're not going to make the american people pay the price again for a group of minority republicans that say they want to threaten to default occasionally. >> you said earlier you think the republicans have given a bit, or at least made some progress in terms of moving

toward you. where has the administration moved towards the republicans? what is it markets should believe in that we've been that the for a month and the characterizations of the negotiations we get are somewhere between backwards and nowhere. >> again, there's a bit of inevitable orchestrated drama in these things. that's the way it works. those republicans in leadership have a tough job. they're in a tough place. they're trying to find a way to get agreement among their caucus on a set of basic realities now. that's part of what you're hearing. just a bit of storm around that. i think you see the broad outlines of a framework now look more inevitable. there's more movement towards that broader recognition of that. very strong support from the business community for that broad outline. we've been spending a lot of time with them and a broad mix of investors, small businesses. again, i'd say there's broad support out there for not just extending these tax cuts for 98%

of americans but for an agreement that has rates going up with tax reform to limit deductions alongside a set of very substantial, very difficult long-term savings on the spending side. very broad support of that and no support anywhere as far as i can tell for reaching agreement that leaves the economy vulnerable to periodic threats of default. >> i want to come back to that question. where has the administration moved towards the republicans here? where is the give there? where's the flexibility? >> again, what we've said is that if republicans recognize this basic reality that rates are going to have to go up as part of a balanced plan, then we believe, and we will be prepared to do a substantial amount of meaningful reforms and savings on the spending side, including entitlements. we're going to take a careful look at how to do that. we're going to want to make sure we're protecting seniors, not just shifting more cost on to them. we think there's room for movement on that side. again, why does that make sense,

steve? if you look at how far apart we are, republicans are saying we're going raise some revenue. we don't know how much. we don't know whose taxes they want to raise in that context. but not enough. what that means is the balance of the agreement is going to have to result in much, much deeper spending cuts, which inevitably are going to hurt things that matter a lot to our economy to medicare security, to the retirement security, to the ability of people to go to college, protect our national security. so the reason why this debate we're having about the structure of agreement is so important is without that recognition that rates are going up, there's going to be too much of a burden on the rest of the priorities of the country. we don't think that makes sense. again, we've spent a lot of time looking at the alternatives. we think there's very broad support from the business community, from investors for the time of framework we've laid out. >> i have to ask you something of deep concern to the markets, which is the. increase in capital gains and

dividends rates. if taxes go up, won't that mean fewer dividends and capital gains taken in the economy? >> let me tell you one proposal on the table. the senate passed a bill, which extends middle class tax cuts for 98% of americans. they allow the marginal rates on earned income to go back to the clinton levels. in that proposal, as i understand it, dividends and cap gains rise modestly to 20%. i think anybody that's looked that the will tell you the mix of rates and deductions and tax treatment of dividends, capital gains now is unaffordable for the country. the current mix we have in current policy is unaffordable. we're going to have to alter that mix. we've laid out the best way we think to do that. if we did that, i think you'd see alongside sensible spending reforms. you'd see very good outcomes for the american economy. the american economy right now

looks very resilient. the biggest thing that stands in the way of much significant strength in growth is this uncertainty about how to reach an agreement. >> what's the right rate for dividends and capital gains? >> in the senate bill, you see there's a proposal to let them go to 20. that's certainly one way to do it. ultimately, you have to look at the overall mix of tax treatment, investment income -- >> is there a number that's too high? should they be treated as ord their income? >> some people say that. there's been a lot of bipartisan proposals that would propose that. bowles/simpson is one of them. we're going to look at the overall mix. we want something that's going to have a good, strong incentive for future investment and a strong growth component. can i just mention one thing? >> sure. >> we're trying to make sure we're doing something that's going to be good for economic growth in the country in the interest of the average american. so we think as part of a

balanced framework, we think there's going to be some room to make some investments in education and infrastructure, things that are good for the long-term growth prospects of this economy. we're going to look at the overall mix through that basic prism. >> i want to ask one final question about leadership. the center piece of your stance on the negotiations is to raise taxes on the wealthy. >> that's not the center piece of our plan. the center piece is a balanced mix of spending reforms and tax reforms that preserve the ability for us to invest in things that are absolutely essential to our ability to grow in the future. >> but so far, when it comes to raising taxes on the wealthy, one thing we know about that from all the polls is it's very popular. it's not something in which you're expending political capital to make that happen. tell me again where the president is exercising leadership -- >> i wouldn't say it's ever popular. look at the history of american politics the last 30 years or the last 40 years.

never popular to do what this president did, which is to try to explain why it's important for there ato be a modest amoun of tax increases on wealthy americans. we're not proposing to simply try to raise taxes along this context. we're trying to make sure we do that it only alongside a set of reforms and investments so both sides can be confident that the sacrifices they're making can produce a famework that's better for how the economy grows going forward. >> i want to come back to that one issue. where has the president expended political capital? on which particular issue so far has he done something that is unpopular? cutting medicare, cutting medicaid, raising the retirement age. those are the things the poll shows is very unpopular. >> you look at the politics of each of those reforms. you'll find they were

exceptionally unpopular among significant numbers of americans. the president believes, as i do, that a mix of reforms like that are going to be necessary as part of an agreement that puts us on a better path to a stronger economy. i think we're make some progress, steve. i think the broad outlines of a framework look inevitable. i think that's encouraging, even though we have a bit of a ways to go. >> thank you for joining us. i wish you with luck in your negotiations. back to you, maria. >> steve, thank you so much. steve liesman with the secretary of treasury. let's get reaction to that exclusive interview. that's coming up after that short break. on deck, senator jeff sessions is with me, a ranking member of the senate budget committee. richard shelby is also with me. and maya mcguinness. this busy edition "the closing bell" is just getting started. we're back in a minute. they've been committed to putting clients first.

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welcome back. you just heard from timothy geithner. did the exclusive interview you just saw move the needle in terms of the fiscal cliff being any closer to a deal? chief washington correspondent john harwood watching this event closely. john. >> reporter: i think what we saw in that interview that steve had was further confirmation of the

fundamental outlines in the administration's strategy. one, rates have to go up. they're trying to break republicans on the issues of rates. although, they're not insisting that rates go all the way up to 39.6. you could see something in between. the second thing is they're taking a very hard line on the debt limit. the president said in remarks today to the business round table he has some cover from business on that because they don't want to see that limit that could be damaging to the u.s. credit raiting. the combination of those two things are the fundamental levers the administration is going to try to use to force republicans to compromise. then the compromising from the administration will come on the issues of entitlements, medicare, social security is, and medicaid. >> all right, jauohn. thank you so much. let's keep the focus in washington and get reaction. republican senator jeff sessions with me. he was listening in to the interview. he joins is me now from capitol

hill. good to see you, senator. thanks for joining us. let me me get your reaction. >> well, he's spinning a situation that's so serious. we've got to confront honestly and directly. he said on the sundays shows that they were fixing our debt problem, putting us on a sustainable course. that's not correct. the plan that he has announced leaked out, as he has outlined it. it increases taxes $1.6 trillion and does not cut spending any. it increases spending $1 trillion. it has almost no impact on the $9 trillion in debt we're projected to incur over the next ten years. so this is why we've got a problem. the president proposes nothing to deal with the entitlements that are growing at three times the rate of inflation and indeed represent more than half of the spending in our government.

so i just got to tell you, they've got a lot of pride here, a lot of human being roe brus, me. this president needs to be helping us come up with a plan that puts america on a long-term, sound basis. paul ryan did that in the house. that plan is sustainable. it changes the debt course of america. the president has yet to lay out anything like that. >> i'll tell you what really struck me in a moment from that interview, but let me keep on with what you're saying. you have called the secretary's claim of $2 in spending cuts for every $1 in tax increases an egregious falsehood. he did say $600 billion in cuts is what is being proposed there. he said it's health care. you said he's not even tinkering with medicare. where are these cuts? >> let me respond to that. they cut providers -- again, these are the hospitals and

doctors. $600 billion over ten years. that's a reduction in spending. he's not mentioning the fact that he gives away $1.2 trillion of the sequester. that whole savings that we agreed to as part of the budget control act he eliminates. in other words, that's an additional $1.2 trillion in spending over the current agreement that we're operating under today. it's a $1.2 trillion increase. so there's a net substantial increase in spending right there. and another $.5 trillion in additional spending that's part of his program. so it increases spending. there's not a dime of cuts in spending. >> right, because they're asking for more stimulus with everything else. let me ask you about this bipartisan letter being sent to leaders of the house and senate in an effort to stress the need for compromise on the cliff. where do you see room for compromise? tell our audience where you would give.

would you similarply refuse anyl that includes higher taxes on the highest earners? >> the president campaigned on raising taxes $800 billion, which i thought was not acceptable, personally. now he wants twice that. the republicans have offered substantial -- boehner has offered substantial tax increase, $800 billion, actually, but he believes it can be done by closing loopholes without raising the rates, which would be better for the economy. i don't believe we need to raise taxes. we can bring this government under control through spending reductions. certainly, if taxes are raised, they should be done in a way that's most beneficial or least damaging to the viability of our economy. >> yeah. i got to tell you, after listening to that interview, i

feel pretty confident that we're going over the cliff. are we going to go over the cliff, senator? >> we should not go over the cliff. we should have been working on this all year, not waiting until the last minute. the reason we're not making progress, let me tell you -- and i've been consistent on this. they're bringing these numbers up in secret. if they were laid out in public so the american people knew just how much taxes they were increasing, just how little spending reductions -- or how much increases in spending. as a political mover, very effective at being able to hide the net impact of his plan and ride this general good feeling of his election. it's not a healthy situation politically. we've got to do the right thing for the country. >> all right, senator. i was really struck by how easily he said -- steve said,

look, if we don't get higher taxes we go over the cliff? absolutely. good to have you on the program. >> we want to avoid that. every republican is firmly convinced we should not go over this cliff and should be avoided. >> exactly. thank you, senator. see you soon. we'll certainly come back to you as the story develops. we get more reaction right now from maya mcginness. she's been rallying up ceos across the country to get involved in this and get heard. maya, nice to see you again. thanks for joining us. >> nice to see you. >> give me your ae reaction to geithner interview. >> i think i had the same reaction you did. we were tossing around going over the cliff in a way that makes me nervous. as the clock is ticking and we're getting closer to the end of december, i think we all wish we were closer to being confident there's a deal.

this may well be what has to go on behind the scenes in order for everyone to come to a compromise that will be a difficult one, but what we need right now is reassurance. we need reassurance we're going get in place a serious debt deal that will set us on a more sustainable fiscal path, and we need reassurance the two sides can come together in a very difficult situation but govern through some of these big challenges we all know are there. it's a nail biter right now. i wish we weren't at the point where in washington we are holding the economy and the country hostage in these negotiations. both sides have been doing it. we have to change the way that washington is working through hard problems. >> you're absolutely right, maya. it really is holding everybody hostage. you have been very articulate in terms of the numbers and the nitty-gritty on how to get a deal done. i want you to talk to us about that. you've been able to rally up ceos who have put money into this, gone to the white house, made their voices heard. you've said if you eliminate the

hoop holes and deductions, that gets you close to $1 trillion. tell me where you believe the revenue increases could come from and where the spending cuts could come from. i know you can probably do this in five minutes whereas they have to do this dog and pony show all day long. >> well, we can hash out a deal, but i shouldn't run away from the fact that this is going to be hard. so one of my first concerns is that we haven't set the national stage to understand that we have dug such a huge fiscal hole that we're really going to have to make difficult choices on all sides of the budget. so what's good now is there does seem to be an understanding that revenues will have to be on the table and that spending will have to be on the table. i would point out that right now the discussion has been focusing more on revenues. spending will have to be reined

in. there's this huge debate right now. let's hope we can raise as much of the revenues as possible while also reforming the tax code. we should not ignore that our tax code is a disaster. we have over $1 trillion a year in lost revenues because of tax breaks, deductions, exemptions, exclusio exclusions. we should take that on as part of this and try to reform the tax code while we're generating revenues. at the same time, we're going really need to reform those entitlement programs so that they're there for the long term. >> maya, real quick, we got to run, but real quick, number one, can we actually get our arms around this country's debt without cutting into medicare? that's the first question. and number two, do you believe we're going over the fiscal cliff? what are the implications for our children if we don't get our arms around the zmet redebt? real quick two questions. >> hello?

>> maya? maya, are you with me? >> hey, folks. >> unbelievable. two important questions for maya. we're going to get those answers from maya. i really want to get out there what it means for our children because getting our arms around the debt is quite important and whether or not we need to cut medicare. we'll get her answers when we come back. meantime, let's slip in a short break. then we have ranking republican on the senate banking committee, richard shelby in the shohouse. she's goi he's going to be up next on his reaction from the geithner interview. stay with us. busy hour. well, if it isn't mr. margin.

mr. margin? don't be modest, bob. you found a better way to pack a bowling ball. that was ups. and who called ups? you did, bob. i just asked a question. it takes a long time to pack a bowling ball. the last guy pitched more ball packers. but you... you consulted ups. you found a better way. that's logistics. that's margin. find out what else ups knows. i'll do that. you're on a roll. that's funny. i wasn't being funny, bob. i know.

welcome back. we're talking with maya macguiness. let me get your take on this final question. number one, two-part question. do we need to cut medicare in terms of really getting our arms around the debt of this country? number two, if we don't get our arms around the debt and lower the debt and deficits of the u.s., what are the implications for our kids? what are the implications for the economy? give it to us straight. >> there's no question that the most important challenge for us to tackle here is controlling health care costs. medicare is at the center of it when it comes to the budget. we're going to have to do as much as possible to get on top of the fact that health care costs squeezing out the rest of the budget. that's true through the whole

system, and we're going to have to fix the way that entitlement program works. in terms of what this means for the country, the whole issue here is are we going to leave the economy strong enough for the next generation? that's what this comes down to. what we're going now, we're making these short-term choices. we've been make them for years. we're spending more than we're willing to pay for, and we're basically saying to the next generation, here's the bill. and it's going to just undermine the strength of the economy. i should point out, we're not borrowing that to invest. we're borrowing that to consume. so as important as it is to avoid the fiscal cliff, what we really need to do is take this opportunity to put in place a big debt deal and also rethink the way that we do budgeting in this country to strengthen the economy for the long term, not weaken it as we're on the track to do now. >> all right, maya. great stuff. we appreciate you talking to us. see you soon. please join us once again.

we get more reaction now on the geithner interview from capitol hill with senator richard shelby. he's ranking member on the ba banking committee. good to have you on the program. your reaction to the geithner interview an and the fiscal cliff comments. >> i thought secretary geithner played it fairly close to the vest except he keeps investing on more taxes on the most productive people in the country. i don't know if that's politics or if it's real. i don't believe myself that the democrats are negotiating seriously yet. no one wants to go over the cliff. no one wants to wake up on january the 1st with a nightmare on our hands. i believe that if geithner on behalf of the administration and especially the president gets serious about this, we will avoid it. otherwise, i think they better watch what they wish for. >> yeah, let me share with you

what i was most struck by in that interview. i want to roll this sound bite here. this was actually -- this surprised me. listen to this. >> i want to understand the administration's position when it comes to raising taxes on the wealthy, those making more than $250,000. if republicans do not agree to that, is the administration prepared to go over the fiscal cliff? >> oh, absolutely. again, there's no process tespen agreement that doesn't involve those rates going up on the top 2% of the wealthiest. remember, it's only 2%. >> so there you go. there you go, senator. absolutely, he said. i mean, based on what i just heard, i think we're going over the cliff. what do you think? >> i'm not sure we're going to go over the cliff, but we could. i believe that there will be some hopefully sane people that get together to avoid the cliff. it's not good for the administration. it could set us into a real

recession. it'll be on their watch. they think it'll be the republicans that'll pay the price. i'm not sure about this because the president is so emboldened right now. he thinks he's got a mandate because he's won another term, but he hasn't got a mandate. he's going to have to negotiate. he's got to get real. i believe that speaker boehner and others have said, look, let's go to the table and let's get serious. i don't believe the democrats have gotten serious yet. >> do you believe you can raise the same amount of revenue by not raising taxes? can you raise the same amount of revenue the president wants by doing, you know, other things like reforming the tax code, like eliminating certain desuctions and loopholes, or do you need to raise taxes? is that the reality? also, what are you going to give on? >> the reality is we don't know. we've got to run some real numbers there. i believe we could limit deductions rather than raise people's rates. i believe that we could close a

lot of loopholes. the tax code is horrible. the person you had on right before me made more sense than i've heard in a long time on television. the spending goes on. the borrowing goes on. the taxes go on, but the cuts never seem to get there. >> what's wrong with raising taxes? why are you so against it? >> i'm against it because it takes money out of people that are productive. it takes money out of the economy. in the democrats' base, it seems vindictive to know punish people. just keep raising classes, get into class warfare. it doesn't create jobs, i can tell you that. >> we'll leave it there. senator, great to have you on the program. we appreciate your time tonight, senator richard shelby. a rally for the dow industrials, even with all this fighting going on. we're going to tell you what happened, why the final minutes of trading we came off of the highs and lost some steam. we'll run through the winners and losers on the other side of this break.

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welcome back. well, there were other developments aside from the fiscal cliff negotiations today.

apple today, big loser once again. the stock continues in a free fall. bertha coombs on the latest on apple. >> that fall on apple really affecting the overall market. apple closing at the lows of the day. the concerns, essentially, are fundamental, that they may be losing market share when it comes to ipad, slower iphone sales, but also technical. they're really seeing the stock moving below some support levels here. then also, the financials. that was the other side of this. citi with that announcement they were cutting their costs. today one of the big gainers. that set off a rally in financials. bank of america closing about $10 for the first time in 17 months. >> all right, bertha. thanks so much. hopes running high for pandora media, meanwhile. >> the radio advertising market alone that we're just beginning to scratch the surface of is a $15 billion plus market. we're a leader in mobile, which is set to become another $15 billion plus market. >> we're going to hear more from

the radio company ceo. later, our panel of wall street pros will tell you what you need to know about tomorrow morning's market in a full minute and a half. you'll want to know what's going to move money around tomorrow. can't afford to miss it. stick around on "closing bell."

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have beaten expectations, but all investor ts care about is ty reduced their fourth quarter guidance, projecting an adjusted loss of as much as nine cents per share, sending the stock down as much as 20% earlier today. the ceo warned he expects advertisers to be20%. they expect advertisers to be particularly cautious about spending in january. >> we did reduce guidance. i think it's very prudent because of this unique situation we have in which we're sensitive to the mix of ad spend in january as opposed to february and march. >> that pandora is no stranger to volatility. it dropped nearly as much in one day in october and reports that apple is moving towards a streaming radio sir advice which would be seen as a rival. also another factor weighing on pandora's stocks are concerns about its licensing fees. 55% of its revenues are spent on its music costs. maria? >> julia, thank you so much.

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welcome back. as the markets remain focused on the fiscal cliff, what else should we be watching ahead of tomorrow's market trading. we have 30 seconds on the clock for each of our next guests. joining me now is stephanie link from the street. chris from huntington funds. good to see you both. stephanie, kick us off. 30 seconds on the clock. what do you want to see tomorrow? >> interest rate decisions from the ecb as well as bank of england. commentary from mario draghi will be very important about the state of affairs in europe. there's an analyst meeting tomorrow. a lot of this is tied to stronger revenue growth. and there's an analyst meeting tomorrow on hombres. i like both stocks. >> thanks a lot, stephanie. chris, what are you looking for. 30 seconds on the clock. what do you want to look at to move our money?

>> the major impact is looking at the fiscal cliff. any compromise close to that is going to give the market some upward swing. the gop is under extreme pressure since president obama is definitely going to be seeing a wealthy tax added to it. on the economic news, little light tomorrow with initial claims at about 390,000, but the big story is really friday as we look to the jobs report. we believe that the effect of the payroll will be at 50,000 range due to the effect of hurricane sandy which could put our unemployment up to an 8% rate. >> all right. we'll be watching that. thanks very much to you both. we appreciate it. of course we'll be looking at this market and whether or not it loses the steam come the big rally today. ticktock, ticktock on the fiscal cliff. my thoughts on the story from timothy geithner. guess what, folks. i think we're going over the cliff. back in a moment. are system spoke a language all its own

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♪ ...could end with adding a close friend. ♪ the lexus december to remember sales event is on, offering some of our best values of the year. this is the pursuit of perfection. and finally today my observation on america barrelling faster toward the fiscal cliff. first off steve leaseman had a fantastic interview on this show with treasury secretary tim geithner. we are going over the fiscal

cliff, that's my take. the administration is not budging. the only way they will even come to the table to negotiate is with the top earners paying higher tax rates, not just more in taxes, higher tax rates. but for some reason it must be higher rates, period. that's it. end of story. not because it is going to move the needle and fix our out of control debt, because it won't, not because it will put america on a fiscal sustainable path, because it won't. that is where the president has drawn his line in the sand. meanwhile, the president is now proposing a form of kicking the can down the road. raising taxes now with a promise to deal with entitlement reform and tax reform next year or beyond. that's the real worrisome proposal. here we are at the center of probably the most important fiscal conversation this country has had in decades. no one thinks we can continue on this spending path we are on without a day of reckoning coming sooner or later. why would we not seize the